Working Paper Series 4 / 2010 Thriving in Open Innovation Ecosystems : Toward a Collaborative Market Orientation

As the locus of competition increasingly intensifies to be at the ecosystem level, firms need to develop their capabilities to enhance their innovation and performance. In this paper the authors extend the notion of market orientation to develop these capabilities at the ecosystem level. The paper introduces the concept of collaborative market orientation (CMO), which is defined as a set of capabilities that are jointly built, maintained and exercised by members within an ecosystem. The authors highlight three such CMO capabilities -- (1) collaborative intelligence generation, (2) collaborative intelligence dissemination and (3) collaborative responsiveness. By drawing upon literature to identify its constitutive routines the authors provide actionable steps for organizations to build CMO capabilities. ABSTRACT Market orientation relates to how well an organization is aligned towards identifying, disseminating and responding to market intelligence. Prior research has typically conceptualized and examined market orientation as a property of an individual firm or business unit. Such research has shown that market orientation can enhance firm-level innovation and performance. More recently however, the locus of competition and innovation has started to shift from the individual firm to the organizational network or ecosystem. To account for these changing realities, we extend the notion of market orientation to a collaborative environment. For this purpose, we introduce the concept of collaborative market orientation (CMO), which we define as a set of capabilities that are jointly built, maintained and exercised by members within an ecosystem. In this paper, we highlight three such CMO capabilities -- (1) collaborative intelligence generation, (2) collaborative intelligence dissemination and (3) collaborative responsiveness. By drawing upon the extant literature to identify its constitutive routines we provide actionable steps for organizations to build CMO capabilities. We would like to thank the National Endowment for the Science, Technology and the Arts (NESTA) for a grant towards this research study. We would like to thank David Simoes-Brown for helpful discussions and comments on this paper.

[1]  M. Tushman,et al.  External Communication and Project Performance: An Investigation Into the Role of Gatekeepers , 2011 .

[2]  H. Chesbrough.  Business Model Innovation: Opportunities and Barriers , 2010 .

[3]  D. Teece.  Business Models, Business Strategy and Innovation , 2010 .

[4]  Frances Fiorino.  Reading the wind , 2010 .

[5]  Ashwin W. Joshi.  Salesperson Influence on Product Development: Insights from a Study of Small Manufacturing Organizations , 2010 .

[6]  Gilad Ravid,et al.  Information overload and the message dynamics of online interaction spaces: a theoretical model and empirical exploration , 2004, IEEE Engineering Management Review.

[7]  Ramon Casadesus-Masanell,et al.  Open Versus Closed Innovation: A Model of Discovery and Divergence , 2010 .

[8]  Srikanth Paruchuri,et al.  Intraorganizational Networks, Interorganizational Networks, and the Impact of Central Inventors: A Longitudinal Study of Pharmaceutical Firms , 2010, Organ. Sci..

[9]  U. Lichtenthaler,et al.  A Capability-Based Framework for Open Innovation: Complementing Absorptive Capacity , 2009 .

[10]  K. Fichter.  Innovation Communities: The Role of Networks of Promotors in Open Innovation , 2009 .

[11]  U. Lichtenthaler.  Absorptive Capacity, Environmental Turbulence, and the Complementarity of Organizational Learning Processes , 2009 .

[12]  Mie Augier,et al.  Dynamic Capabilities and the Role of Managers in Business Strategy and Economic Performance , 2009, Organ. Sci..

[13]  K. Weick.  Educational organizations as loosely coupled systems , 1976, Gestión y Estrategia.

[14]  K. Boudreau,et al.  How to Manage Outside Innovation , 2009 .

[15]  Clayton M. Christensen,et al.  Reinventing Your Business Model , 2008 .

[16]  Kevin Zheng Zhou,et al.  Market orientation, job satisfaction, product quality, and firm performance: Evidence from China , 2008 .

[17]  D. MacKenzie,et al.  The use of knowledge about society , 2008 .

[18]  S. Jayachandran,et al.  The Relative Impact of Marketing, Research-and-Development, and Operations Capabilities on Firm Performance , 2008 .

[19]  C. K. Prahalad,et al.  The New Age of Innovation: Driving Cocreated Value Through Global Networks , 2008 .

[20]  C. Frith.  Social cognition , 2008, Philosophical Transactions of the Royal Society B: Biological Sciences.

[21]  D. Teece.  Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance , 2007 .

[22]  Morten T. Hansen,et al.  Different knowledge, different benefits: toward a productivity perspective on knowledge sharing in organizations , 2007 .

[23]  Detmar W. Straub,et al.  Competitive and Cooperative Positioning in Supply Chain Logistics Relationships , 2007, Decis. Sci..

[24]  Eric T. G. Wang,et al.  Interorganizational Governance Value Creation: Coordinating for Information Visibility and Flexibility in Supply Chains , 2007, Decis. Sci..

[25]  Boris Durisin,et al.  Absorptive capacity: Valuing a reconceptualization , 2007 .

[26]  Jennifer A. Howard-Grenville.  Developing Issue-Selling Effectiveness over Time: Issue Selling as Resourcing , 2007, Organ. Sci..

[27]  K. Atuahene–Gima,et al.  Market Knowledge Dimensions and Cross-Functional Collaboration: Examining the Different Routes to Product Innovation Performance , 2007 .

[28]  Daniel A. Levinthal,et al.  Exploration and Exploitation in Organizational Learning , 2007 .

[29]  Balaji R. Koka,et al.  The Reification of Absorptive Capacity: A Critical Review and Rejuvenation of the Construct , 2006 .

[30]  Ken G. Smith,et al.  The interplay between exploration and exploitation. , 2006 .

[31]  Arvind Parkhe,et al.  Orchestrating Innovation Networks , 2006 .

[32]  S. Zahra,et al.  Entrepreneurship and Dynamic Capabilities: A Review, Model and Research Agenda , 2006 .

[33]  H. Chesbrough,et al.  Beyond High Tech: Early Adopters of Open Innovation in Other Industries , 2006 .

[34]  Oliver Gassmann,et al.  Opening Up the Innovation Process: Towards an Agenda , 2006 .

[35]  A. Salter,et al.  Open for innovation: the role of openness in explaining innovation performance among U.K. manufacturing firms , 2006 .

[36]  Walter W. Powell,et al.  Networks of Innovators , 2006 .

[37]  B. Menguc,et al.  Creating a firm-level dynamic capability through capitalizing on market orientation and innovativeness , 2006 .

[38]  Jennifer A. Howard-Grenville.  The Persistence of Flexible Organizational Routines: The Role of Agency and Organizational Context , 2005, Organ. Sci..

[39]  Martha S. Feldman,et al.  Organizational Routines as a Unit of Analysis , 2005 .

[40]  Johan Frishammar,et al.  Managing External Information in Manufacturing Firms : The Impact on Innovation Performance , 2005 .

[41]  Omar El Sawy,et al.  Absorptive Capacity Configurations in Supply Chains: Gearing for Partner-Enabled Market Knowledge Creation , 2005, MIS Q..

[42]  R. Chandy,et al.  The Impact of Acquisitions on Innovation: Poison Pill, Placebo, or Tonic? , 2005 .

[43]  K. Weick,et al.  Organizing and the Process of Sensemaking , 2005 .

[44]  Suzanne D. Pawlowski,et al.  Bridging User Organizations: Knowledge Brokering and the Work of Information Technology Professionals , 2004, MIS Q..

[45]  John C. Narver,et al.  Responsive and proactive market orientation and new-product success. , 2004 .

[46]  Markus C. Becker.  Organizational routines: a review of the literature , 2004 .

[47]  George S. Day,et al.  Driving Through the Fog: Managing at the Edge , 2004 .

[48]  D. Ketchen,et al.  Information Processing, Knowledge Development, and Strategic Supply Chain Performance , 2004 .

[49]  David L. Deeds,et al.  Exploration and Exploitation Alliances in Biotechnology: A System of New Product Development , 2004 .

[50]  Constance E. Helfat,et al.  The dynamic resource-based view: capability lifecycles , 2003 .

[51]  Christina Fang,et al.  The Economics of Strategic Opportunity , 2003 .

[52]  S. Winter.  Understanding dynamic capabilities , 2003 .

[53]  P. Bansal.  From Issues to Actions: The Importance of Individual Concerns and Organizational Values in Responding to Natural Environmental Issues , 2003 .

[54]  G. Luffman,et al.  Determining the scope and impact of market orientation profiles on strategy implementation and performance , 2003 .

[55]  Lori Rosenkopf,et al.  Overcoming Local Search Through Alliances and Mobility , 2003, Manag. Sci..

[56]  M. Feldman,et al.  Reconceptualizing Organizational Routines as a Source of Flexibility and Change , 2003 .

[57]  Henry Chesbrough,et al.  Open Innovation: The New Imperative for Creating and Profiting from Technology , 2003 .

[58]  Christoph Zott,et al.  DYNAMIC CAPABILITIES AND THE EMERGENCE OF INTRAINDUSTRY DIFFERENTIAL FIRM PERFORMANCE: INSIGHTS FROM A SIMULATION STUDY , 2003 .

[59]  C. P. Goodman,et al.  The Tacit Dimension , 2003 .

[60]  Patricia M. Norman.  Protecting knowledge in strategic alliances: Resource and relational characteristics , 2002 .

[61]  H. Chesbrough,et al.  The Role of the Business Model in Capturing Value from Innovation: Evidence from Xerox Corporation's Technology Spin-Off Companies , 2002 .

[62]  Morten T. Hansen,et al.  Knowledge Networks: Explaining Effective Knowledge Sharing in Multiunit Companies , 2002 .

[63]  Maurizio Zollo,et al.  Deliberate Learning and the Evolution of Dynamic Capabilities , 2002 .

[64]  Bryan A. Lukas,et al.  Schools of thought in organizational learning , 2002 .

[65]  Katherine A. Lawrence,et al.  Moves that matter: Issue selling and organizational change. , 2001 .

[66]  Van Raaij.  The implementation of a market orientation. Designing frameworks for managerial action , 2001 .

[67]  A. Nerkar,et al.  Beyond local search: boundary‐spanning, exploration, and impact in the optical disk industry , 2001 .

[68]  K. Atuahene–Gima,et al.  An Empirical Investigation of the Effect of Market Orientation and Entrepreneurship Orientation Alignment on Product Innovation , 2001 .

[69]  M. Feldman.  Organizational Routines as a Source of Continuous Change , 2000 .

[70]  Kathleen M. Eisenhardt,et al.  DYNAMIC CAPABILITIES, WHAT ARE THEY? , 2000 .

[71]  G. Ahuja.  Collaboration Networks, Structural Holes, and Innovation: A Longitudinal Study , 1998 .

[72]  M. Sawhney,et al.  Communities of Creation: Managing Distributed Innovation in Turbulent Markets , 2000 .

[73]  Anil K. Gupta,et al.  Knowledge flows within multinational corporations , 2000 .

[74]  R. Gulati,et al.  STRATEGIC NETWORKS , 2000 .

[75]  John C. Narver,et al.  Market‐oriented is more than being customer‐led , 1999 .

[76]  P. Kotler,et al.  Marketing in the Network Economy , 1999 .

[77]  Bernard L. Simonin.  Ambiguity and the process of knowledge transfer in strategic alliances , 1999 .

[78]  Jeffrey H. Dyer,et al.  The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage , 1998 .

[79]  John C. Narver,et al.  Strategic Management Journal Research Notes and Communications Customer-led and Market-oriented: Let's Not Confuse the Two , 2022 .

[80]  Judy A. Siguaw,et al.  Effects of Supplier Market Orientation on Distributor Market Orientation and the Channel Relationship: The Distributor Perspective , 1998 .

[81]  W. Powell.  Learning from Collaboration: Knowledge and Networks in the Biotechnology and Pharmaceutical Industries , 1998 .

[82]  Lorne Olfman,et al.  Organizational Memory , 1998, Proceedings of the Thirty-First Hawaii International Conference on System Sciences.

[83]  Ravi S. Achrol,et al.  Changes in the Theory of Interorganizational Relations in Marketing: Toward a Network Paradigm: , 1997 .

[84]  Andrew B. Hargadon,et al.  Technology brokering and innovation in a product development firm. , 1997 .

[85]  Kenneth W. Koput,et al.  A Chaotic Model of Innovative Search: Some Answers, Many Questions , 1997 .

[86]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[87]  W. Ocasio.  TOWARDS AN ATTENTION-BASED VIEW OF THE FIRM , 1997 .

[88]  Elizabeth E. Wierba,et al.  Reading the wind: how middle managers assess the context for selling issues to top managers , 1997 .

[89]  H. Gatignon,et al.  Strategic Orientation of the Firm and New Product Performance , 1997 .

[90]  B. Uzzi,et al.  The Sources and Consequences of Embeddedness for the Economic Performance of Organizations: The Network Effect , 1996 .

[91]  Bernard J. Jaworski,et al.  Market orientation: Review, refinement, and roadmap , 1996 .

[92]  Clayton M. Christensen,et al.  CUSTOMER POWER, STRATEGIC INVESTMENT, AND THE FAILURE OF LEADING FIRMS , 1996 .

[93]  W. Powell,et al.  Interorganizational Collaboration and the Locus of Innovation: Networks of Learning in Biotechnology. , 1996 .

[94]  Ajay K. Kohli,et al.  Market Intelligence Dissemination across Functional Boundaries , 1996 .

[95]  K. Atuahene–Gima,et al.  An exploratory analysis of the impact of market orientation on new product performance a contingency approach , 1995 .

[96]  John C. Narver,et al.  Market Orientation and the Learning Organization , 1995 .

[97]  Constance E. Helfat,et al.  Evolutionary trajectories in petroleum firm R&D , 1994 .

[98]  G. Day.  The Capabilities of Market-Driven Organizations , 1994 .

[99]  C. Fombrun,et al.  Macrocultures: Determinants and Consequences , 1994 .

[100]  I. Nonaka.  A Dynamic Theory of Organizational Knowledge Creation , 1994 .

[101]  James M. Sinkula.  Market Information Processing and Organizational Learning , 1994 .

[102]  Daniel A. Levinthal,et al.  The myopia of learning , 1993 .

[103]  J. Dutton,et al.  SELLING ISSUES TO TOP MANAGEMENT , 1993 .

[104]  Bernard J. Jaworski,et al.  Market Orientation: Antecedents and Consequences , 1993 .

[105]  D. Teece.  Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy , 1993 .

[106]  J. Farley,et al.  Corporate Culture, Customer Orientation, and Innovativeness in Japanese Firms: A Quadrad Analysis , 1993 .

[107]  P. Drucker.  Post-Capitalist Society , 1993 .

[108]  R. E. Miles,et al.  Managing 21st century network organizations , 1992 .

[109]  Organizations , 1992, Restoration & Management Notes.

[110]  J. March,et al.  Variable risk preferences and the focus of attention , 1992 .

[111]  Ravi S. Achrol,et al.  Evolution of the Marketing Organization: New Forms for Turbulent Environments , 1991 .

[112]  Rashi Glazer.  Marketing in an Information-Intensive Environment: Strategic Implications of Knowledge as an Asset , 1991 .

[113]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[114]  G. Huber.  Organizational Learning: The Contributing Processes and the Literatures , 1991 .

[115]  Bernard J. Jaworski,et al.  Market Orientation: The Construct, Research Propositions, and Managerial Implications , 1990 .

[116]  S. Floyd,et al.  The strategy process, middle management involvement, and organizational performance , 1990 .

[117]  G. Pisano.  The R&D Boundaries of the Firm: An Empirical Analysis , 1990 .

[118]  Kim B. Clark,et al.  Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of , 1990 .

[119]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[120]  O. Hart,et al.  Property Rights and the Nature of the Firm , 1988, Journal of Political Economy.

[121]  John C. Narver,et al.  The Effect of a Market Orientation on Business Profitability , 1990 .

[122]  J. March,et al.  Managerial perspectives on risk and risk taking , 1987 .

[123]  W. K. Schilit.  AN EXAMINATION OF THE INFLUENCE OF MIDDLE-LEVEL MANAGERS IN FORMULATING AND IMPLEMENTING STRATEGIC DECISIONS , 1987 .

[124]  Sanford J. Grossman,et al.  The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration , 1986 .

[125]  D. Teece.  TRANSACTIONS COST ECONOMICS AND THE MULTINATIONAL ENTERPRISE An Assessment , 1986 .

[126]  Robert A. Burgelman.  Robert A. BURGELMAN & Leonard R. SAYLES (1986), Inside Corporate Innovation: Strategy, Structure and Managerial Skills , 1985 .

[127]  Mark S. Granovetter.  Economic Action and Social Structure: The Problem of Embeddedness , 1985, American Journal of Sociology.

[128]  S. Arnott,et al.  Schools of thought , 1985, Nature.

[129]  Marc J. Dollinger,et al.  Environmental Boundary Spanning and Information Processing Effects on Organizational Performance , 1984 .

[130]  R. Daft,et al.  Toward a Model of Organizations as Interpretation Systems , 1984 .

[131]  B. Wernerfelt,et al.  A Resource-Based View of the Firm , 1984 .

[132]  Gerald Zaltman,et al.  A Comparison of Factors Affecting Researcher and Manager Perceptions of Market Research Use , 1984 .

[133]  D. Hambrick.  Environmental scanning and organizational strategy , 1982 .

[134]  George P. Huber,et al.  Organizational Information Systems: Determinants of Their Performance and Behavior , 1982 .

[135]  Gavin J. Wright.  An evolutionary theory of economic change , 1982 .

[136]  R E Miles,et al.  Organizational strategy, structure, and process. , 1978, Academy of management review. Academy of Management.

[137]  Howard E. Aldrich,et al.  Boundary Spanning Roles and Organization Structure , 1977 .

[138]  Henry Mintzberg,et al.  The Structure of "Unstructured" Decision Processes , 1976 .

[139]  O. Williamson.  Markets and hierarchies, analysis and antitrust implications : a study in the economics of internal organization , 1975 .

[140]  M. Shubik,et al.  A Behavioral Theory of the Firm. , 1964 .

[141]  Wei-Hao Wang,et al.  Studies , 1926 .